Buying property in Thailand
Here is some useful guidance for a Non-Thai resident /Foreigner who wishes to purchase a property in Thailand either for investment or to settle down in the Kingdom.
Thailand laws prevent a Non-Thai resident from owning any real estate but they are permitted to lease property and are allowed to purchase a condominium under certain conditions.
How can foreigners purchase property in Thailand?
Land and House - According to Thai law which states that non Thai residents are not allowed to buy, own land or property such as; houses, shophouses, commercial, retail or industrial land. There are some exceptions for very large corporate purchases with the approval of Thailand Board of Investment, but generally land and property is for Thai individuals and Thai companies only, however foreigners are permitted to purchase condominiums.
With some exceptions, Thai law requires that 51 % of the shareholder is to be held by a Thai Juris-tic person and the foreign ownership of a company is limited to 39%, he/ she can only be the director of the company and has the right to buy or sell land and house.
If a foreign buyer wishes to purchase the land and building as their own home, there are 2 safe ways to proceed as follows:
1. Set up a Thai Limited company and have a Thai business partner
2. An initial 30 years lease with 2 renewal periods of 30 years each
To set up the company the foreign buyer will require to have a Thai business partner. It is highly recommended todo this process via a local solicitor According to Thai Law and is to protect yourself. Once the company has been registered, the foreign buyer has his/her right to purchase the freehold of the land through their Thai Limited company. The land will be owned in the Thai company name and not the individual.
A 30-year lease - this is normally for a long term lease contract and is valid for a 30 years lease unless the land is for a manufacturer in which case it can be valid for 50 years or more. Please note that the lease contract is for the land and house and the house and land owner will be registered under a different name holder. The foreign buyer will own the structure in his/ her name if the lease contract expires and there is no renewal of the con-tract the house will remain under the same owner name and the government cannot take it back. If the lease has expired for more than3 years the foreign buyer can renew the lease for a further 3 years only. Unless the lease contract has registered the right with a 30 years lease at the Land Department, the foreign buyer will still have the right to continue with their lease even if the house has already been sold.
Proof of land owner - To become a landowner, the land must be registered with the Land
Department and the Land Department will have issued a certified document for ownership of land called a “ Cha note or a land title deed document” and this can be registered for more than one ownership.
Condominium - Thailand allows a foreign buyer to purchase freehold condominium property in Thailand, with a 100% ownership of the unit under a foreign name.
For the overall building, the majority of the units must remain owned by Thai buyers, not more than 49% of the sellable area can be owned by foreign nationals or a foreign entity such as a trust or company.
The correct process to transfer money - For foreign buyers buying a condominium property in Thailand, the buyer is required to demonstrate that the funds for the purchase equivalent to the purchase price identified in the Sale and Purchase Agreement under the buyer’s name has been transferred into Thailand from overseas. The buyer will need to show a Foreign Exchange Transaction Form (FOREX/FET) at the time of transfer at the land department to obtain the title deed.
What is a Foreign exchange transaction form (FOREX/FET)? - A Foreign Exchange
transaction form (referred to as a FOREX/FET, FOREX or FET form or Tor Tor 3 in Thai (TT3)), is an official bank document issued by the receiving bank upon receipt of foreign currency from over-seas, equivalent to or greater than US$50,000 into bank accounts in Thailand.
If you are purchasing a condominium unit in Thailand under foreign ownership, you must have a FOREX form equivalent to the purchase price mentioned in the Sale and Purchase An agreement under your name. The original FOREX form must be submitted to the land department in order to register a condominium in a non-resident foreigner's name. The FOREX form is important under foreign ownership as you will need to show it and supporting documents should you wish to liquidate your property in the future and repatriate the funds back to your home country or out of Thailand.
In order to obtain the FOREX form, you will need to contact and obtain from your local bank in Thailand and under your name “the owner” and specify the details of the payment as “for the pur-pose of purchasing Condominium unit #, project name, Province, Thailand”. In some countries, due to restrictions on length of message for specifying details, a code is supplied for this purpose. Whenever money is transferred out of Thailand, the tax free amount of the transfer is determined by the initial amount transferred into Thailand as stated in the FOREX form or credit note. Note there are no taxes applied to transfers into or out of Thailand currently.
If you wish to purchase in Cash - We strongly advise not to bring cash to make payments in any currency. There is an options that you can either make the payment via the bank using a cashier cheque or a bank draft.
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